The market is rallying for a second day as the dollar slides and commodities run. Yesterday's bounce in the market came on lighter volume, causing many to dismiss the positive action. But as we mentioned, the market was pretty heavily oversold, so the relief rally continues.

Materials stocks are leading the action (+2.5%) as the slide in the dollar boosts commodities. Oil is rising to $71.80 a barrel, but gold is the start today, hitting all-time highs at $1043.

In corporate news, Mosaic (MOS) reported weak earnings (potash sales), but the stock is bouncing higher nonetheless. Earnings season kicks off in earnest tomorrow, and then heats up all next week.

European shares were higher after house prices in the UK rose for the 3rd straight month in September. Asian shares were mostly higher after the Reserve Bank of Australia raised interest rates by 25 basis points to 3.25%. Normally rate hikes are not cheered by equity investors, but in this case, the implied message that the global economy has steadies is being taken as a good sign.

The 10-year yield is getting a small lift to 3.25%; and the VIX is plunging -5.3% back down to 25.40, just above its 50-day average.

Trading comment: If this early rally holds, this 2-day bounce will have been a lot stronger than many expected. The S&P 500 turned lower last week at the 1069 level, so that is an area of resistance to watch.

Leading growth stocks are bouncing back, but many are still below their recent highs as well. STAR is breaking out to a new high, as is PCLN, SXCI, and CERN. If more names join this list, that will be the best indication that we may have once again seen the lows for now.

long GLD, STAR, VXX